Basic Need-to-Know Facts

Question 1

Federal Estate Tax Exemption in 2025

Answer 1

13.99 Million

Question 2

Federal Gift Tax Exclusion Amount

Answer 2

$19,000

Question 3

Maximum Federal Benefit Rate for SSI in 2025

Answer 3

$967

Question 4

Income Cap

Answer 4

300% of Max. Fed. Benefit Rate ($2,901)

Question 5

ADEA Age

Answer 5

40

Question 6

Citation for Self Settled SNTs

Answer 6

42 USC 1396p(d)(4)(a)

Question 7

Full Retirement Age

Answer 7

67 years old

Question 8

Quarter of Coverage (SS credit)

Answer 8

$1,810 (2025)

Question 9

Substantial Gainful Activity

Answer 9

$1,610/month

Question 10

Dependent Adult Child (DAC) share of retired workers PIA

Answer 10

50% at Retirement/75% at workers Death

Question 11

Age when Remarriage no longer affects survivor benefits

Answer 11

60

Question 12

Estate Tax Due

Answer 12

9 months after DOD or 5 year extension for DSUEA purposes only

Question 13

Alternate Estate Tax Valuation Date

Answer 13

6 months following DOD (It’s a trap!)

Question 14

Earliest Penalty Free WIthdrawl from QRAs

Answer 14

59.5 years (with some exceptions)

Question 15

RMD start date

Answer 15

April 1 of the year after the year in which you turn 73

Question 16

Tax Return Form Numbers: Individual, Trust, Gift, Estate

Answer 16

1040, 1041, 709, 706

Question 17

Qualified Disability Trust Exemption

Answer 17

$5,050

Question 18

Federal Income Tax Brackets

Answer 18

10%. 12%, 22%, 24%, 32%, 35%, 37%

Question 19

ADLs

Answer 19

1. Bathing/showering,
2. Dressing,
3. Eating/feeding,
4. “functional mobility” (usually listed as “transferring”),
5. Personal hygiene and grooming,
6. Toileting

Question 20

IDLs

Answer 20

handling medication,
making change/handling money,
shopping,
use of telephone or communication device,
transportation,
housework

Question 21

ISM Calculation

Answer 21

(1/3 of MFBR + $20 (or, at $967 MFBR, $342.33) – leaving a maximum SSI benefit of $967 – $342.33 = $624.67)

Question 22

Relation of Federal Income tax brackets to Capital Gains Tax

Answer 22

For lower and middle-income taxpayers, long-term capital gains might be taxed at a lower rate than their ordinary income. For instance, someone in the 22% income tax bracket would pay only 15% on long-term capital gains.
For high earners, the top long-term capital gains rate (20%) is still lower than the top ordinary income tax rate (37%), providing a tax advantage for long-term investments.

Question 23

Short Term Capital Gains - defined and tax rate

Answer 23

taxed at the same rates as ordinary income if the asset was held for one year or less.

Question 24

Long Term Captial Gains - defined and tax rate

Answer 24

(assets held for more than one year) are taxed at lower rates, which depend on the taxpayer’s taxable income:
0% for individuals in the lowest income brackets.
15% for most middle-income taxpayers.
20% for individuals in the highest income brackets.

Question 25

What is a Qualified Disability Trust and what are the requirements?

Answer 25

A QDT is designed to provide financial support for a person with a disability without affecting their eligibility for government benefits like Supplemental Security Income (SSI) or Medicaid. Eligibility: The trust must be established for the sole benefit of a beneficiary who is considered disabled under the Social Security Administration's definition of disability. Requirements: Disability Certification: The beneficiary must provide certification of disability from a physician. This certification must meet IRS criteria. Trust Document: The trust must be irrevocable, meaning once established, the terms cannot be changed, and it must be dedicated to the beneficiary's welfare.

Question 26

How is a QDT taxed and what is the exemption?

Answer 26

a QDT can claim an exemption amount similar to that of an individual taxpayer, which is adjusted annually for inflation (e.g., $5,050 for 2025). This exemption reduces the taxable income of the trust. Tax Rates: The trust's income is taxed at the rates applicable to individuals rather than the usually higher trust tax rates, which can be beneficial for lower income levels.

Question 27

Requirements of QDOT

Answer 27

1. At least one trustee must be a US citizen or domestic corporation, and this trustee must consent before any distribution of principal can be made 2. Executor of decedent’s estate must make a QDOT election on estate tax return by its due date 3. Every distribution of principal from the trust is hit with the estate tax that would have been imposed on the decedent’s estate had not trust existed 4. Surviving non-US citizen spouse must be entitled to all income from the trust at least annually

Question 28

What is portability? Is such an election required? Standard Deadline? Extended Deadline and restriction on use? Benefit?

Answer 28

What is Portability? Transfer of unused estate tax exemption from deceased to surviving spouse Election Required? Yes — via IRS Form 706 Standard Deadline 9 months after death (15 months with extension) Extended Deadline Up to 5 years (Rev. Proc. 2022-32) if no estate tax return is otherwise required Benefit Surviving spouse can apply DSUE to future gifts or at death

Question 29

Schiavo Case

Answer 29

use substituted judmgent standard when determining end of life wishes for a person.

Question 30

Tulsa Collections vs. Pope

Answer 30

Must give known creditors notice of probate

Question 31

Decamebre

Answer 31

Distributions for trust income are countable toward housing assistance calculations, but not distributions from Princiapl

Question 32

Fickett Case

Answer 32

Attorney can be held liable for malpractice if fiduciary her represents damages principal

Question 33

Glucksberg Case

Answer 33

Physician Assisted Suicide is not a protected right under the Due Process Clause of the 14th amendment

Question 34

Olmstead case:

Answer 34

Least restricted environment for disabled individuals

Question 35

NAELA Aspirational Standards i. Client Identification

Answer 35

Identify which party is the client at the earliest opportunity and communicate to all involved a. The person to whom the duties of loyalty and confidentiality run b. Arrange for private conversation with client, especially if he has diminished capacity, unless attorney determines that private meeting is not in client’s best interest, in which case wishes must still be identified c. Determine whether the client has sufficient capacity to enter into relationship, which acting in accordance with MR 1.14 d. Communicate that attorney only represents the client, even if family comes to meeting, especially if asset transfers are an issue e. Assure that documents are drafted for the benefit of the actual client himself 2. Use an engagement letter or other writing which meets the requirements of ethics code to document what has been told. Especially important if there are “joint clients”

Question 36

So Are Bypass Trusts Still Relevant?

Answer 36

🛡 Asset Protection Assets in a bypass trust are protected from creditors of the surviving spouse, including lawsuits and divorce. 💰 Appreciation Shielding Assets in a bypass trust grow outside the surviving spouse’s estate. 👨‍👩‍👧 Blended Families The deceased spouse can ensure assets in the bypass trust eventually go to their children, not a new spouse or stepfamily. 🧾 State Estate Tax Planning Many states have their own estate tax, and most do not allow portability. 🔁 GST Planning A bypass trust can be structured to use the deceased spouse’s generation-skipping transfer (GST) exemption. GST exemption is not portable. 📉 Future Exemption Reductions The federal exemption is scheduled to be cut roughly in half in 2026 unless Congress acts. Using a bypass trust now could “lock in” today’s higher exemption amount.

Question 37

When Might You Prefer a QTIP Trust?

Answer 37

The estate is under the federal exemption limit and tax deferral is more important than exemption preservation. You want your spouse to benefit, but maintain full control over where the assets go afterward. You want to take advantage of a second basis step-up for capital gains planning. You are in a state with no estate tax (or a high exemption) and want simplicity.